008 benefits mnagement

BENEFITS MANAGEMENT

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ASSOCIATION FOR PROJECT MANAGEMENT

•APM’s mission statement is: “To develop and promote the professional disciplines of project and programme management for the public benefit”.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT •All organisations invest in change in order

to deliver their business strategy and this is necessary to remain competitive.

BENEFITS MANAGEMENT •Benefits are the single reason why we

undertake change.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT •Often the race for delivery of the project

detract managers from the reason why change was undertaken in the first place.

BENEFITS MANAGEMENT •Most organisations undertake formal

projects and programmes to deliver change.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Portfolio management has become the accepted standard for managing the overall set of projects and programmes across an organisation or business area.

BENEFITS MANAGEMENT •Change such as organisational design, employee

engagement and customer communications are all part of benefits change.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Formal benefits management is less than twenty years old and has developed out of the limitations of more traditional investment appraisal techniques, such as Return on Investment.

BENEFITS MANAGEMENT •Benefit management is still developing and the

reasons are:

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT •senior executives becoming dissatisfied with

process-led project and programme management not delivering the expected business outcomes;

BENEFITS MANAGEMENT •benefits management is often wrongly seen as a

specialist discipline requiring deep expertise;

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT •benefits management is often misperceived as

only a financial skill-set;

BENEFITS MANAGEMENT •a misperception that benefits management is

benefits tracking which provides monitoring of metrics only after the change has occurred.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•The increased emphasis on benefits management in the APM Body of Knowledge, PRINCE2 and Managing Successful Programmes is starting to make a difference.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•The economic climate is driving the requirement for greater value for money, including cost reduction, across both public and private sectors;

BENEFITS MANAGEMENT

•Most business organisations in the UK are experiencing a tightening of financial spending, particularly those in the public sector.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Government is facing massive cuts-choices over resource allocation, head-count, capital programmes etc.

BENEFITS MANAGEMENT

•The private sector is facing difficult choices in order to minimise costs in challenging market conditions.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•In the recent APM national survey, 54% of respondents indicated that cost reduction is a primary driver of projects and programmes in their organisation.

•Approval for investment in change now requires tangible evidence of sustainable benefits, both financial and non-financial.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Change is almost continual for business organisations and many people are impacted.

BENEFITS MANAGEMENT

•Portfolio management is now recognised as a standard board-level competency

BENEFITS MANAGEMENT

•According to John Kotter in his Harvard Business Review article on leading change, ‘Up to 70% of change initiatives fail to deliver on the benefits that they set out to achieve’.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Traditionally, project and programme management has had limited exposure in the board room.

BENEFITS MANAGEMENT

•Portfolio management is now the accepted standard for managing the overall se of projects and programmes across an organisation.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Portfolio management ensures alignment of change with corporate business strategy whilst prioritising the use of resources.

BENEFITS MANAGEMENT

•Ultimately, senior executives are interested in the strategic benefits from change and the associated risks to them.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Successful benefits management provides the framework to ensure that portfolio management is benefits focussed.

BENEFITS MANAGEMENT

•The need to align the management of change with corporate performance management across the organisation

BENEFITS MANAGEMENT

• All organisations undertake performance management at a corporate level whether through monthly management accounts, performance reports or other measures.

BENEFITS MANAGEMENT

BENEFITS MANAGEMENT

•Public Service Agreements detail the aims and objectives of UK government departments over a three-year period.

BENEFITS MANAGEMENT

•Such agreements also describe how targets will be achieved and how performance against these targets will be measured.

BENEFITS MANAGEMENT

• In the recent APM national survey, 60% of respondents indicated that their organisation had a standard set of key performance indicators to measure corporate business performance.

BENEFITS MANAGEMENT

• However the same survey revealed that only 12% of respondents used a software application to support management information on benefits.• This implies a lack of maturity in the

software market for benefits management.

This strategy will consist of above elements:

Benefits Identification

Benefits Profiling

Benefits Planning

BENEFITS MANAGEMENT

Benefits/Dis-benefits

Quantifiableimprovement

Measurable improvement

Benefits Management

Initialization of project

production of pictures

Agreementto continue

Benefits Management

Evidence collection

Review and learning

Developmentof updated

pictures

Productionof pictures

Initializationof project

Agreementto proceed

Review andlearning

Evidencecollection

Systemdevelopmen

t

Developmentof updated

pictures

Future/Maintenance

project

AbandonProject

-Formativereview

- Variance- Determinetrade-offs

- Determination ofbusiness

opportunity- Validatedopportunity

- Determinations ofprimary

stakeholders- Opportunity/solution lexicon

Development of:Business picture,Financial picture,Project picture

Involving primarystakeholders

ABR process (Remenyi & Sherwood-Smith, 1998)

ProductSelectionAppraisal

Initializationof project

Agreementto proceed

Review andlearning

Brainstorming stageEvidencecollection

SystemDevelopment

Developmentof updated

product

Future/Maintenance

project

APPROVED

Formativereview of the

selectedproduct

Start of VE

Determination ofbusiness opportunityValidated opportunity

Determinations ofprimary stakeholders

ETC

Development of BusinessPlan

Financial Feasibility study,Project plan

Involving primarystakeholders

Adoption of Supply chainManagement

Internationalcompetitors

Nationalcompetitors

DISAPPROVED

Benefits Management process (OGC, 2008)

The benefitsmanagement

strategy

The benefitsrealization

plan

BenefitsIdentification

Optimizingthe mix ofbenefits

Reviewing andmaximizing

benefits

Realizing andtrackingbenefits